Answer :
To determine the maximum amount Kimmy can afford for a mortgage each month, we follow these steps:
1. Calculate the Monthly Salary:
First, we need to find out how much Kimmy earns each month. Kimmy's annual salary is given as [tex]$72,000. \[ \text{Monthly Salary} = \frac{\text{Annual Salary}}{12} \] By dividing the annual salary by 12 (the number of months in a year), we find: \[ \text{Monthly Salary} = \frac{72,000}{12} = 6,000.00 \] 2. Determine the Maximum Monthly Mortgage Payment: To find out how much Kimmy can afford to spend on her mortgage each month, we apply a common financial guideline. This guideline suggests that an individual should spend no more than 28% of their gross monthly income on housing expenses (including mortgage payments). \[ \text{Max Mortgage Payment} = 0.28 \times \text{Monthly Salary} \] Using Kimmy's monthly salary: \[ \text{Max Mortgage Payment} = 0.28 \times 6,000.00 = 1,680.00 \] Therefore, the maximum amount Kimmy can afford for a mortgage each month is \( \$[/tex]1,680.00 \).
Among the given options:
- A. [tex]$1416.67 - B. $[/tex]1291.67
- C. [tex]$2000.00 - D. $[/tex]1500.00
The answer that best matches our calculation is not listed exactly, but based on our correct calculation of $1,680.00, we see that none of the provided options are correct. If forced to pick the closest option or if the issue is considered a rounding or typographical error, A might be closest, but it isn't accurate.
In conclusion, based on the computation done, the closest option to the correct answer could be assessed, but accurate finance-related decisions should note exact figures, and none of the provided options are perfectly correct.
1. Calculate the Monthly Salary:
First, we need to find out how much Kimmy earns each month. Kimmy's annual salary is given as [tex]$72,000. \[ \text{Monthly Salary} = \frac{\text{Annual Salary}}{12} \] By dividing the annual salary by 12 (the number of months in a year), we find: \[ \text{Monthly Salary} = \frac{72,000}{12} = 6,000.00 \] 2. Determine the Maximum Monthly Mortgage Payment: To find out how much Kimmy can afford to spend on her mortgage each month, we apply a common financial guideline. This guideline suggests that an individual should spend no more than 28% of their gross monthly income on housing expenses (including mortgage payments). \[ \text{Max Mortgage Payment} = 0.28 \times \text{Monthly Salary} \] Using Kimmy's monthly salary: \[ \text{Max Mortgage Payment} = 0.28 \times 6,000.00 = 1,680.00 \] Therefore, the maximum amount Kimmy can afford for a mortgage each month is \( \$[/tex]1,680.00 \).
Among the given options:
- A. [tex]$1416.67 - B. $[/tex]1291.67
- C. [tex]$2000.00 - D. $[/tex]1500.00
The answer that best matches our calculation is not listed exactly, but based on our correct calculation of $1,680.00, we see that none of the provided options are correct. If forced to pick the closest option or if the issue is considered a rounding or typographical error, A might be closest, but it isn't accurate.
In conclusion, based on the computation done, the closest option to the correct answer could be assessed, but accurate finance-related decisions should note exact figures, and none of the provided options are perfectly correct.
